Investment Risks

Investment risks refer to the potential losses or negative outcomes that investors may encounter when investing in financial assets. These risks arise from various factors that can affect the performance of an investment, including market volatility, changes in economic conditions, interest rates, and company-specific events. Different types of investment risks include market risk (the risk of investments losing value due to market fluctuations), credit risk (the risk of a borrower failing to meet obligations), liquidity risk (the risk of not being able to sell an investment quickly without a significant price discount), and operational risk (the risk of loss due to inadequate or failed internal processes). Managing these risks is crucial for investors to protect their capital and achieve desired investment returns.